Criminal Entrepreneurs

In 1817 a serious robbery using false keys was carried out at the busy Portsmouth dockyard, home to the Royal Navy.  In response, the government offered a reward to anyone who could design a lock that could not be picked.  The next year a local ironmonger by the name of Jeremiah Chubb patented a mechanism that rendered a lock useless if it detected anything other than its own keys.  This encouraged Jeremiah and his brother, Charles, to found what would become one of the world’s great security companies.  It also led them to diversify into a number of other lines, including designing the world’s first burglar and fire-resistant safe, advertised in 1838 as being able to “repel the force and ingenuity of the most skillful burglar.”

This was a serious claim, because like all good entrepreneurs, crooks and criminals are quick to adopt the newest technology and the latest form of organization in pursuit of their ignoble visions.  This makes criminal entrepreneurs a moving target, just like any worthy competitor.  




In Chubb’s case, such a claim required devising safes that could withstand attacks by metal wedges, the ring saw, nitro-glycerin, and oxygen cutters.  Well organized gangs stole safes from showrooms and reverse-engineered them.  Police found and broke-up an underground school for safebreakers.   Foiled for a time by new materials, British thieves eventually resorted to kidnapping clerks and gaining their keys and cooperation by placing a rope around their necks--a stunning innovation in channel strategy.  This led Chubb to invent the time lock.  By WWI, thanks to entrepreneurial crooks, Chubb had designed a safe room large enough to host dinner parties and strong enough to survive a naval bombardment.

An ocean away, in turn-of-the-century Chicago, the growth of railroads and meatpacking was matched step-for-step by innovative criminals like Mont Tennes, who adopted the emerging chain-store model, gained insider information by bribing the telegraph company (and more than a few cops), and built the nation’s largest pre-WW I gambling operation.  Tennes was never arrested but was finally forced into retirement, leaving a wealth of entrepreneurial ideas on which Al Capone and his men could build.

In June 1937 the U.S. government published a fascinating report on technology trends with a section on “law and order” that highlighted the polygraph, methods for reading blood stains on washed material, and a new silver nitrate method of raising fingerprints.  The report also noted, however, that thieves were becoming adept at forging fingerprints, had turned to plastic surgery to change their looks, and had adopted the telephone and automobile as innovative tools in carrying out crimes--presumably a nod to the work Capone had done to build on Tennes’ foundation.

Also in Chicago(land), but in the early 1980s, I ran cable TV operations right in the backyards of both Motorola and Zenith.  At the time, the industry was moving cable technology to an “addressable” platform, meaning we could--you won’t believe--turn channels on and off from a central office!  About three months after we would launch a new “scrambled box” for TV sets, little ads began to appear in the local paper (no Internet yet) offering “chips” that would enable subscribers to unscramble HBO and all of their pay channels, whether they “paid” for them or not.  (This was a preview of the great music thief, Napster, and the first whiff of the argument that if something was technically possible, then it must be ethically alright.)  I can’t say with any assurance that it was Motorola or Zenith engineers making the special descrambler chips, but I do know that the bad guys had a product development cycle about 9 months faster than ours.

All of which brings us to the present battle on the Web as we try to protect our valuable information flows and troves.  In the Sept/Oct 2012 Technology Review, a fascinating articles concludes that “the antivirus era is over”--that the crooks are too smart and too far ahead of conventional security to be stopped by traditional firewalls.  So, like the lock-makers of the nineteenth century who had just seen their safe blown open with nitro-glycerin, the global IT folk are on their horses looking for the next set of game-changers.  

One, called CrowdStrike, assumes that a virus can breach most any security, but isn’t much good unless it can start moving documents and information out of the system--and that can be tracked.  The CEO says, “We need to focus on the shooter, not the gun.”  (NB: Al Capone was eventually convicted of tax evasion.)  Another plan of attack goes right to the heart of the criminal entrepreneur, saying that if the economic payoff does not exceed the cost of hack and steal, it might lead some cyber-thieves onto the straight and narrow.

This doesn’t count evil empires, however, or hobbyist hackers.  

All of which suggests that criminals are a nearly bottomless source of innovation whose role, difficult as it might be to stomach at times, plays a crucial part in making the good guys more inventive, faster, and smarter.

Sources

Currer-Briggs, Noel, Contemporary Observations on Security from the Chubb Collectanea
1818-1968

Boorstin, Daniel J., The Americans: The Democratic Experience

Technological Trends and National Policy Including the Social Implications of New Inventions, June 1937, Report of the Subcommittee on Technology to the National Resources Committee

“The Antivirus Era is Over,” www.technologyreview.com and Technology Review, Sept/Oct 2012